Applying Uber Analytics

The source of success at Uber and Airbnb is their use of business analytics. What lessons can all business leaders learn from their examples?

By Geoffrey Garrett

I had a conversation recently with an early Uber investor who made something very clear to me: Uber is a data and analytics company. The same is true for the other tech valuation megastar, Airbnb. Investors are wowed by the fact that Uber’s fixed-cost base is so low. It doesn’t own its fleet of vehicles, and most people who drive its cars aren’t permanent employees. Critics worry about how well insured Uber’s drivers and their vehicles are, and whether it is a good thing Uber seems so hard to regulate. But talking with people who really know Uber, the key to its success is how much the company knows about its market—in particular, where the customers and its drivers are and what they want. The genius of the market, economists tell us, is that its “invisible hand” magically connects buyers and sellers and also figures out how much goods or services are worth. In Uber’s case, the magic is analytics.

Uber’s customers can find out before they book a ride how many vehicles are in their area and how long before one gets to them. On the other side of the transaction, Uber drivers know whether it’s worth their while to get into their cars because they know how many customers there are, where they are and how much they are willing to pay. Substitute houses and apartments for cars and SUVs, and you have the Airbnb business model. It is a cliché of the big data era that information is everywhere. But as Uber and Airbnb show, the key to business success is knowing what to do with it.

That is why Wharton Online has today launched its new Business Analytics Specialization on Coursera. The first course is in Customer Analytics, to be followed by People Analytics, Accounting Analytics and Operations Analytics. The specialization will finish up with a capstone project where you can apply what you’ve learned to a real business problem at Yahoo.

You don’t have to be a math whiz or a geeky computer scientist to take and benefit from our specialization. You will learn simple but powerful tools that will help you make better business decisions by seeing the strategic horizon through the blizzard of information that is all around you.

Who knows? Maybe your idea will turn into the next tech “unicorn,” powered by your business analytics savvy. I hope you’ll enroll in the specialization and see for yourself.

Geoffrey Garrett is dean and Reliance Professor of Management and Private Enterprise at the Wharton School of the University of Pennsylvania.